MTD for VAT - double checking requirements for after April 2020 - The Book-keepers Forum (UK)

Cheshire · Master Book-keeper

MTD for VAT - double checking requirements for after April 2020

Leger · Master Book-keeper

It's just the 9 boxes Joanne. Presumably if sage can produce a page with the 9 boxes on that should be compliant.

I found Taxfiler a doddle when I used it this time round, as it picks up the box numbers from the import. (VT+ pre MTD in my case) I'm guessing it would be the same with Sage.

In John's software all you need to do is rename the boxes to his formulae before importing which should then be picked up once imported.

That's my understanding anyway, what was it that put doubts in your mind?

johnhemming · Senior Member

The point about MTD (Digital Records) is that there needs to be an electronic audit trail. You don't have to transfer all of the records just the 9 boxes. For ITSA the same principles apply, but there are many more boxes on the SA forms and also a bit more summary is needed. (in the sense that some of the submitted figures are divided up in more detail).

Hence as long as you don't retype the totals and just taken them from the Sage CSV files all is good.

Cheshire · Master Book-keeper

I started to doubt myself after having a dicsussion with an Accountant. But then also shortly followed by a dicussion with Sage. I did say to Sage 'please start perpetuating this rubbish' but I started to worry in case I had missed something.

The none boxes are dumped to excel straight from Sage into bridging or sent via VT excel add in. What I have noticed is that the VAT number needs to be manually added, even though the VAT number is showing in the software. That imo is potentially more dangerous than the old system. Lets face it box four was always a check method, being an auto calc, but adding the VAT number can result in human error (number blindness and all that!)

Thanks both for the re-assurance!

johnhemming · Senior Member

I have a double check on the vat number with the objective of preventing people from submitting the return to the wrong account. So far so good.

VinceH · Expert

FWIW, if you're going via a spreadsheet, you could use a formula to validate the (UK) VAT number. I've just quickly dropped this one in LibreOffice Calc and it works:

=IF(MOD((MID(B1,1,1)*8)+(MID(B1,2,1)*7)+(MID(B1,3,1)*6)+(MID(B1,4,1)*5)+(MID(B1,5,1)*4)+(MID(B1,6,1)*3)+(MID(B1,7,1)*2)+MID(B1,8,2),97)=0,"Valid","Invalid")

Cell B1 contains the VAT number *as a text string* - so I've put it in as a number in A1 (with no spaces) and B1 contains =TEXT(A1,"#")

It should be possible to do the same in Excel, though the exact formula might have subtle differences.

This works because our VAT numbers have a simple formula to validate them:

Digit 1 * 8 + Digit 2 * 7 + Digit 3 * 6 + Digit 4 * 5 + Digit 5 * 4 + Digit 6 * 3 + Digit 7 * 2

That total plus Digits 8 and 9 as a two digit number must be divisible wholly by 97* - that's what the IF and MOD check; MOD returns the "remainder" when the first number (that sum and the final two digits as a two digit number) is divided by 97. If the result is 0, it's a valid VAT number, but if it's non-zero (if there's a remainder) it isn't.

John's 'double check' probably does the same thing programmatically.

* I think the correct description is to add up the first seven digits as multiplied above, then keep deducting 97 until you get a negative number, and that number is the last two digits - but to make it work as a formula... see above.

Cheshire · Master Book-keeper

Thanks Vince - I will have a play with this. Used VT add in for this one and realised after I had done the first batch that the info is only retained properly if you add to it as a workbook, so was just thinking that I should add the VAT number to the workbook and then I can pull it forward to the VAt returns via a simple formula (has to be simple for my brain!)

John - a very sensible thing to have. Can see there could bo some carnage with other software.

Leger · Master Book-keeper

Cheshire wrote:
What I have noticed is that the VAT number needs to be manually added, even though the VAT number is showing in the software. That imo is potentially more dangerous than the old system. Lets face it box four was always a check method, being an auto calc, but adding the VAT number can result in human error (number blindness and all that!)

Hi Joanne

Can you copy the VAT no from sage? (eg ctrl+c).

Cheshire · Master Book-keeper

Doh - yes John! Gawd, sometimes I overthink stuff! Thank you.

johnhemming · Senior Member

Cheshire wrote:
John - a very sensible thing to have. Can see there could bo some carnage with other software.

Apart from agents I have some clients who run more than one legal entity that is vat registered. There is, therefore, a danger that people can submit the wrong return on the right vat number or the right return on the wrong vat number. Hence I require that people keep the vat number in the data as it goes through the system. That means the system won't allow the wrong vat return to be submitted. So far no-one has submitted a return on the wrong number through my system so that works quite nicely.

ITSA differs from VAT in that you can resubmit an amendment for some information until it is finally frozen (they use the word crystallised).